Corporate Finance & Lawsuit Lending
As we’ve seen with the recent hearing to address the issue here in Texas, lawsuit lending is on the rise in the United States. This practice is no longer limited to personal injury class action lawsuits; it has also infected the highest levels of the corporate world. As this article from the New York Times points out, major law firms are regularly turning to lenders to finance major litigation. The dangers of this practice are obvious: at any level, lawsuit lending incentivizes frivolous lawsuits, threatens the integrity of the legal system, reduces business productivity, and threatens to drag the economy down.
When law firms and corporations seek to “get ahead” through unethically funded frivolous lawsuits, we all pay the price.